Portman Ridge Finance (NASDAQ:BCIC) versus Hamilton Lane (NASDAQ:HLNE) Head to Head Analysis

Hamilton Lane (NASDAQ:HLNE) and Portman Ridge Finance (NASDAQ:BCIC) are both finance companies, but which is the superior investment? We will compare the two businesses based on the strength of their profitability, dividends, institutional ownership, valuation, risk, analyst recommendations and earnings.

Dividends

Hamilton Lane pays an annual dividend of $2.40 per share and has a dividend yield of 2.5%. Portman Ridge Finance pays an annual dividend of $1.08 per share and has a dividend yield of 15.1%. Hamilton Lane pays out 36.6% of its earnings in the form of a dividend. Portman Ridge Finance pays out -196.4% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Hamilton Lane has raised its dividend for 8 consecutive years. Portman Ridge Finance is clearly the better dividend stock, given its higher yield and lower payout ratio.

Analyst Ratings

This is a breakdown of current recommendations and price targets for Hamilton Lane and Portman Ridge Finance, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Hamilton Lane	0	2	6	1	2.89
Portman Ridge Finance	1	4	0	0	1.80

Hamilton Lane presently has a consensus target price of $131.57, indicating a potential upside of 37.08%. Portman Ridge Finance has a consensus target price of $9.25, indicating a potential upside of 29.73%. Given Hamilton Lane’s stronger consensus rating and higher possible upside, analysts clearly believe Hamilton Lane is more favorable than Portman Ridge Finance.

Volatility and Risk

Hamilton Lane has a beta of 1.19, meaning that its share price is 19% more volatile than the S&P 500. Comparatively, Portman Ridge Finance has a beta of 0.5, meaning that its share price is 50% less volatile than the S&P 500.

Profitability

This table compares Hamilton Lane and Portman Ridge Finance’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Hamilton Lane	32.14%	25.10%	15.75%
Portman Ridge Finance	-5.72%	14.09%	5.44%

Insider and Institutional Ownership

97.4% of Hamilton Lane shares are owned by institutional investors. Comparatively, 30.1% of Portman Ridge Finance shares are owned by institutional investors. 24.0% of Hamilton Lane shares are owned by company insiders. Comparatively, 1.3% of Portman Ridge Finance shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Earnings and Valuation

This table compares Hamilton Lane and Portman Ridge Finance”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Hamilton Lane	$758.99 million	7.02	$249.18 million	$6.56	14.63
Portman Ridge Finance	$61.15 million	1.44	$11.49 million	($0.55)	-12.96

Hamilton Lane has higher revenue and earnings than Portman Ridge Finance. Portman Ridge Finance is trading at a lower price-to-earnings ratio than Hamilton Lane, indicating that it is currently the more affordable of the two stocks.

Summary

Hamilton Lane beats Portman Ridge Finance on 16 of the 18 factors compared between the two stocks.

About Hamilton Lane

Hamilton Lane Incorporated is a private equity firm specializing in early venture, emerging growth, turnaround, middle market, mature, mid-venture, bridge, buyout, distressed/vulture, loan, mezzanine in growth capital companies. It prefers to invest in energy, industrials, consumer discretionary, health care, real estate, information technology, utilities, and consumer services. The firm prefers to invest in Africa/Middle East, Asia/Pacific, Europe, Latin America and Caribbean, United States of America, and Canada. The firm prefers to invest between $1 million and $100 million. It prefers to take majority stake. Hamilton Lane Incorporated was founded in 1991 and is based in Conshohocken, Pennsylvania with additional offices across Europe, North America, Asia Pacific and the Middle East.

About Portman Ridge Finance

Portman Ridge Finance Corporation is a business development company specializing in investments in unitranche loans (including last out), first lien loans, second lien loans, subordinated debt, equity co-investment, buyout in middle market companies. It also makes acquisitions in businesses complementary to the firm’s business. It primarily invests in healthcare, cargo transport, manufacturing, industrial & environmental services, logistics & distribution, media & telecommunications, real estate, education, automotive, agriculture, aerospace/defense, packaging, electronics, finance, non-durable consumer, consumer products, business services, utilities, insurance, and food and beverage sectors. The fund typically invests $1 million to $20 million in its portfolio companies. It provides senior secured term loans from $2 million to $20 million maturing in five to seven years; second lien term loans from $5 million to $15 million maturing in six to eight years; senior unsecured loans $5 million to $23 million maturing in six to eight years; mezzanine loans from $5 million to $15 million maturing in seven to ten years; and equity investments from $1 to $5 million. The fund targets the companies with EBITDA between $5 million and $25 million. While investing in debt securities, it invests in those middle market firms with EBITDA between $10 million and $50 million and/or total debt between $25 million and $150 million. It invests in minority, and majority or control equity positions alongside its private equity sponsor partners.